New Delhi: The domestic equity market saw both extremes in Calendar 2018: the benchmark indices hit new peaks midway through the year, only to give up those gains towards the end.
But the pain was quite acute at the stock level: 85 per cent or 2,011 out of 2,371 actively traded scrips failed to create wealth for investors, giving negligible or negative returns for the year. Dozens of midcap and smallcap stocks fell up to 90 per cent during the calendar year.
Nirav Modis Gitanjali Gems topped the list, destroying 98.55 per cent of investor wealth in a year. The stock traded at Rs 1.10 on Thursday against Rs 71.05 on January 1, 2018.
“At the bottom of the cycle in 2013, the Nifty Midcap index traded at a 700-bps discount to Nifty on a trailing basis. But in January 2018, it traded at a 2,200 bps premium to Nifty. A part of it has come down,” Hiren Ved of Alchemy Capital Management told ETNOW in an interview.
Ved said the index would never go back to quote those premiums again. “Optically, valuations look expensive, as a lot of the PSU banks have reported losses, leading to a contraction in the premium,” he said.
Shares of companies like Sunstar reality, Krishna Ventures, Yamini Investments and Crescent Leasing plunged over 95 per cent this year, with real estate, finance and NFBC sectors witnessing maximum wealth destruction.
Over 90 stocks – including names like Kwality, Ashapura Intimate Fashions, Bombay Rayon, Vakrangee, GTL Infrastructure, Amtek Auto, Rolta India, Punj Lloyd, Videocon Industries, 8K Miles, Atlanta and Gammon Infrastructure –plunged between 80 per cent to 95 per cent.
Within the year, the Sensex surged to a lifetime high of 38,989 on August 29 and then plunged to a low of 33,349 on October 26 Nifty50 hit 11,750 at the end of August but then dived to 10,030 level by the end of October. It reclaimed the 10,800 mark this past Thursday. The midcap and smallcap indices, meanwhile, are down 15-25 per cent for the year.
The market capitalisation of BSE-listed companies roughly stood at Rs 143 lakh crore as of December 27, 2018 against Rs 151 lakh crore on December 31, 2017. The figure hit a high of Rs 159.34 lakh crore on August 31.
Both global cues and local factors such as liquidity crisis due to fears of NBFC defaults, negative surprises on the NPA front, worries over corporate governance issues and political concerns hit domestic equities through year. The rate hike cycle in the US also made emerging markets such as India bleed.
Shares of YES Bank, Dewan Housing, PC Jewellers, Jet Airways, Infibeam Avenues, Reliance Capital, Jubilant Industries, Bombay Dyeing, Tata Motors, Dulip Buildcon, Avanti Feeds and Punjab National Bank eroded over half of their value this year.
Only 360 stocks on BSE made investors wealthier. Among them, Sadhana Nitro Chem, Dolat Investments, Darjeeling Ropeway Company, Orient Tradelink, Vikas Proppant & Granite and Think ink Studios surged up to 900 per cent during the year.
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